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EX-31.2 - EX-31.2 - Qurate Retail, Inc.lint-20150630ex3129e132d.htm
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EX-99.2 - EX-99.2 - Qurate Retail, Inc.lint-20150630ex9926dadf2.htm
EX-99.1 - EX-99.1 - Qurate Retail, Inc.lint-20150630ex9914aac1c.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015 

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                             to                             

Commission File Number 001-33982

LIBERTY INTERACTIVE CORPORATION

(Exact name of Registrant as specified in its charter)

 


incorporation or organization)


Identification No.)

State of Delaware

(State or other jurisdiction of
incorporation or organization)

84-1288730

(I.R.S. Employer
Identification No.)

 

 

12300 Liberty Boulevard
Englewood, Colorado

(Address of principal executive offices)

80112

(Zip Code)

 

Registrant's telephone number, including area code: (720) 875-5300

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes    No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes     No 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

 

 

 

 

 

Large accelerated filer 

Accelerated filer 

Non-accelerated filer 

(do not check if
smaller reporting company)

Smaller reporting company 

 

Indicate by check mark whether the Registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes     No 

The number of outstanding shares of Liberty Interactive Corporation's common stock as of July 31, 2015 was:

 

 

 

 

 

 

 

 

 

Series A

 

Series B

 

 

 

 

 

 

 

QVC Group

 

431,719,984

 

29,252,683

 

Liberty Ventures

 

134,701,104

 

7,092,111

 

 

 

 

 

 

 

 

 

 


 

Table of Contents

 

 

 

 

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES Condensed Consolidated Balance Sheets (unaudited) 

    

I-3

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements Of Operations (unaudited) 

 

I-5

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements Of Comprehensive Earnings (Loss) (unaudited) 

 

I-7

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements Of Cash Flows (unaudited) 

 

I-8

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES Condensed Consolidated Statement Of Equity (unaudited) 

 

I-9

 

 

 

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (unaudited) 

 

I-10

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 

 

I-28

Item 3. Quantitative and Qualitative Disclosures about Market Risk. 

 

I-41

Item 4. Controls and Procedures. 

 

I-42

 

 

 

PART II—OTHER INFORMATION 

 

II-1

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 

 

II-1

Item 6. Exhibits 

 

II-2

 

 

 

SIGNATURES 

 

II-3

EXHIBIT INDEX 

 

II-4

 

 

 

I-2


 

 

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(unaudited)

 

 

 

 

 

 

 

 

 

 

    

June 30,

    

December 31,

 

 

 

2015

 

2014

 

 

 

amounts in millions

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,589

 

2,306

 

Trade and other receivables, net of allowance for doubtful accounts of $86 million and $92 million, respectively

 

 

859

 

1,232

 

Inventory, net

 

 

1,029

 

1,049

 

Short term marketable securities (note 6)

 

 

845

 

889

 

Other current assets

 

 

77

 

72

 

Total current assets

 

 

5,399

 

5,548

 

Investments in available-for-sale securities and other cost investments (note 7)

 

 

1,405

 

1,224

 

Investments in affiliates, accounted for using the equity method (note 8)

 

 

1,521

 

1,633

 

Property and equipment, at cost

 

 

1,954

 

2,030

 

Accumulated depreciation

 

 

(934)

 

(937)

 

 

 

 

1,020

 

1,093

 

Intangible assets not subject to amortization (note 9):

 

 

 

 

 

 

Goodwill

 

 

5,266

 

5,404

 

Trademarks

 

 

2,453

 

2,489

 

 

 

 

7,719

 

7,893

 

Intangible assets subject to amortization, net (note 9)

 

 

1,014

 

1,185

 

Other assets, at cost, net of accumulated amortization

 

 

64

 

65

 

Total assets

 

$

18,142

 

18,641

 

 

(continued)

 

See accompanying notes to condensed consolidated financial statements.

I-3


 

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Continued)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

 

2015

 

2014

 

 

 

amounts in millions,

 

 

 

except share amounts

 

Liabilities and Equity

    

 

    

    

    

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

601

 

735

 

Accrued liabilities

 

 

615

 

743

 

Current portion of debt (note 10)

 

 

916

 

946

 

Deferred income tax liabilities

 

 

1,040

 

972

 

Other current liabilities

 

 

237

 

343

 

Total current liabilities

 

 

3,409

 

3,739

 

Long-term debt, including $2,635 million and $2,574 million measured at fair value (note 10)

 

 

7,065

 

7,105

 

Deferred income tax liabilities

 

 

1,739

 

1,849

 

Other liabilities

 

 

202

 

168

 

Total liabilities

 

 

12,415

 

12,861

 

Equity

 

 

 

 

 

 

Stockholders' equity (note 11):

 

 

 

 

 

 

Preferred stock, $.01 par value. Authorized 50,000,000 shares; no shares issued

 

 

 —

 

 —

 

Series A QVC Group common stock, $.01 par value. Authorized 4,000,000,000 shares; issued and outstanding 435,767,426 shares at June 30, 2015 and 447,451,702 shares at December 31, 2014

 

 

5

 

5

 

Series B QVC Group common stock, $.01 par value. Authorized 150,000,000 shares; issued and outstanding 29,252,683 shares at June 30, 2015 and 28,877,554 shares at December 31, 2014

 

 

 —

 

 —

 

Series A Liberty Ventures common stock, $.01 par value. Authorized 400,000,000 shares at June 30, 2015 and 200,000,000 shares at December 31, 2014; issued and outstanding 134,629,854 shares at June 30, 2015 and 134,525,874 shares at December 31, 2014

 

 

1

 

1

 

Series B Liberty Ventures common stock, $.01 par value. Authorized 15,000,000 shares at June 30, 2015 and 7,500,000 shares at December 31, 2014; issued and outstanding 7,092,111 shares at June 30, 2015 and 6,991,127 shares at December 31, 2014

 

 

 —

 

 —

 

Additional paid-in capital

 

 

 —

 

4

 

Accumulated other comprehensive earnings (loss), net of taxes

 

 

(188)

 

(94)

 

Retained earnings

 

 

5,821

 

5,757

 

Total stockholders' equity

 

 

5,639

 

5,673

 

Noncontrolling interests in equity of subsidiaries

 

 

88

 

107

 

Total equity

 

 

5,727

 

5,780

 

Commitments and contingencies (note 12)

 

 

 

 

 

 

Total liabilities and equity

 

$

18,142

 

18,641

 

 

See accompanying notes to condensed consolidated financial statements.

I-4


 

 

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements Of Operations

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

Six months ended

 

 

 

June 30,

 

June 30,

 

 

    

2015

    

2014

    

2015

    

2014

 

 

 

amounts in millions

 

Total revenue, net

 

$

2,252

 

2,483

 

 

4,466

 

4,917

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

Cost of sales (exclusive of depreciation shown separately below)

 

 

1,409

 

1,558

 

 

2,824

 

3,114

 

Operating

 

 

198

 

217

 

 

389

 

430

 

Selling, general and administrative, including stock-based compensation (note 4)

 

 

215

 

278

 

 

419

 

534

 

Impairment of intangible assets

 

 

 —

 

7

 

 

 —

 

7

 

Depreciation and amortization

 

 

161

 

164

 

 

329

 

327

 

 

 

 

1,983

 

2,224

 

 

3,961

 

4,412

 

Operating income

 

 

269

 

259

 

 

505

 

505

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(90)

 

(98)

 

 

(185)

 

(193)

 

Share of earnings (losses) of affiliates, net (note 8)

 

 

87

 

4

 

 

90

 

2

 

Realized and unrealized gains (losses) on financial instruments, net (note 6)

 

 

32

 

(41)

 

 

28

 

(66)

 

Gains (losses) on dispositions, net (note 3)

 

 

111

 

 —

 

 

111

 

 —

 

Other, net

 

 

(29)

 

3

 

 

(14)

 

10

 

 

 

 

111

 

(132)

 

 

30

 

(247)

 

Earnings (loss) from continuing operations before income taxes

 

 

380

 

127

 

 

535

 

258

 

Income tax (expense) benefit

 

 

(122)

 

(40)

 

 

(125)

 

(80)

 

Net earnings (loss) from continuing operations

 

 

258

 

87

 

 

410

 

178

 

Earnings (loss) from discontinued operations, net of taxes

 

 

 —

 

19

 

 

 —

 

38

 

Net earnings (loss)

 

 

258

 

106

 

 

410

 

216

 

Less net earnings (loss) attributable to the noncontrolling interests

 

 

16

 

29

 

 

25

 

57

 

Net earnings (loss) attributable to Liberty Interactive Corporation shareholders

 

$

242

 

77

 

 

385

 

159

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to Liberty Interactive Corporation shareholders:

 

 

 

 

 

 

 

 

 

 

 

QVC Group common stock

 

$

112

 

105

 

 

263

 

215

 

Liberty Ventures common stock

 

 

130

 

(28)

 

 

122

 

(56)

 

 

 

$

242

 

77

 

 

385

 

159

 

 

 

 

 

 

 

 

 

 

 

(Continued)

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements.

I-5


 

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements Of Operations (Continued)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

Six months ended

 

 

 

June 30,

 

June 30,

 

 

 

2015

    

2014

    

2015

    

2014

 

Basic net earnings (losses) from continuing operations attributable to Liberty Interactive Corporation shareholders per common share (note 5):

 

 

 

 

 

 

 

 

 

 

 

Series A and Series B QVC Group common stock

 

$

0.24

 

0.23

 

 

0.56

 

0.46

 

Series A and Series B Liberty Ventures common stock

 

$

0.92

 

(0.47)

 

 

0.87

 

(0.92)

 

Diluted net earnings (losses) from continuing operations attributable to Liberty Interactive Corporation shareholders per common share (note 5):

 

 

 

 

 

 

 

 

 

 

 

Series A and Series B QVC Group common stock

 

$

0.24

 

0.23

 

 

0.55

 

0.45

 

Series A and Series B Liberty Ventures common stock

 

$

0.91

 

(0.47)

 

 

0.85

 

(0.92)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net earnings (losses) attributable to Liberty Interactive Corporation shareholders per common share (note 5):

 

 

 

 

 

 

 

 

 

 

 

Series A and Series B QVC Group common stock

 

$

0.24

 

0.22

 

 

0.56

 

0.44

 

Series A and Series B Liberty Ventures common stock

 

$

0.92

 

(0.38)

 

 

0.87

 

(0.77)

 

Diluted net earnings (losses) attributable to Liberty Interactive Corporation shareholders per common share (note 5):

 

 

 

 

 

 

 

 

 

 

 

Series A and Series B QVC Group common stock

 

$

0.24

 

0.21

 

 

0.55

 

0.43

 

Series A and Series B Liberty Ventures common stock

 

$

0.91

 

(0.38)

 

 

0.85

 

(0.77)

 

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

I-6


 

 

 

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements Of Comprehensive Earnings (Loss)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

Six months ended

 

 

 

June 30,

 

June 30,

 

 

    

2015

    

2014

    

2015

    

2014

 

 

 

amounts in millions

 

Net earnings (loss)

 

$

258

 

106

 

410

 

216

 

Other comprehensive earnings (loss), net of taxes:

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

21

 

2

 

(81)

 

19

 

Share of other comprehensive earnings (losses) of equity affiliates

 

 

(1)

 

1

 

(15)

 

1

 

Share of other comprehensive earnings (losses) of discontinued operations

 

 

 —

 

11

 

 —

 

19

 

Other comprehensive earnings (loss)

 

 

20

 

14

 

(96)

 

39

 

Comprehensive earnings (loss)

 

 

278

 

120

 

314

 

255

 

Less comprehensive earnings (loss) attributable to the noncontrolling interests

 

 

14

 

39

 

23

 

79

 

Comprehensive earnings (loss) attributable to Liberty Interactive Corporation shareholders

 

$

264

 

81

 

291

 

176

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive earnings (loss) attributable to Liberty Interactive Corporation shareholders:

 

 

 

 

 

 

 

 

 

 

QVC Group common stock

 

$

149

 

109

 

184

 

232

 

Liberty Ventures common stock

 

 

115

 

(28)

 

107

 

(56)

 

 

 

$

264

 

81

 

291

 

176

 

 

See accompanying notes to condensed consolidated financial statements.

 

 

I-7


 

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statements Of Cash Flows

(unaudited)

 

 

 

 

 

 

 

 

 

 

Six months ended

 

 

 

June 30,

 

 

    

2015

    

2014

 

 

 

amounts in millions

 

Cash flows from operating activities:

 

 

 

 

 

 

Net earnings (loss)

 

$

410

 

216

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

(Earnings) loss from discontinued operations

 

 

 —

 

(38)

 

Depreciation and amortization

 

 

329

 

327

 

Stock-based compensation

 

 

44

 

51

 

Cash payments for stock-based compensation

 

 

(10)

 

(6)

 

Excess tax benefit from stock-based compensation

 

 

(16)

 

(10)

 

Share of (earnings) losses of affiliates, net

 

 

(90)

 

(2)

 

Cash receipts from returns on equity investments

 

 

27

 

20

 

Realized and unrealized (gains) losses on financial instruments, net

 

 

(28)

 

66

 

(Gains) losses on dispositions

 

 

(111)

 

 —

 

Impairment of intangible assets

 

 

 —

 

7

 

Deferred income tax expense (benefit)

 

 

(30)

 

(66)

 

Other, net

 

 

32

 

7

 

Changes in operating assets and liabilities

 

 

 

 

 

 

Current and other assets

 

 

287

 

311

 

Payables and other liabilities

 

 

(246)

 

(51)

 

Net cash provided (used) by operating activities

 

 

598

 

832

 

Cash flows from investing activities:

 

 

 

 

 

 

Cash paid for acquisitions, net of cash acquired

 

 

(20)

 

 —

 

Cash proceeds from dispositions of investments

 

 

271

 

25

 

Investments in and loans to cost and equity investees

 

 

(98)

 

(31)

 

Cash receipts from returns of equity investments

 

 

200

 

 —

 

Capital expended for property and equipment

 

 

(104)

 

(85)

 

Purchases of short term and other marketable securities

 

 

(626)

 

(257)

 

Sales of short term and other marketable securities

 

 

677

 

237

 

Other investing activities, net

 

 

(47)

 

5

 

Net cash provided (used) by investing activities

 

 

253

 

(106)

 

Cash flows from financing activities:

 

 

 

 

 

 

Borrowings of debt

 

 

1,467

 

1,895

 

Repayments of debt

 

 

(1,628)

 

(1,744)

 

Repurchases of Liberty Interactive common stock

 

 

(377)

 

(478)

 

Minimum withholding taxes on net settlements of stock-based compensation

 

 

(13)

 

(14)

 

Excess tax benefit from stock-based compensation

 

 

16

 

10

 

Other financing activities, net

 

 

(24)

 

(36)

 

Net cash provided (used) by financing activities

 

 

(559)

 

(367)

 

Net cash provided (used) by discontinued operations:

 

 

 

 

 

 

Operating

 

 

 —

 

255

 

Investing

 

 

 —

 

(11)

 

Financing

 

 

 —

 

(24)

 

Effect of foreign currency rates on cash

 

 

 —

 

3

 

Change in available cash held by discontinued operations

 

 

 —

 

(235)

 

Net cash provided (used) by discontinued operations

 

 

 —

 

(12)

 

Effect of foreign currency exchange rates on cash

 

 

(9)

 

(5)

 

Net increase (decrease) in cash and cash equivalents

 

 

283

 

342

 

Cash and cash equivalents at beginning of period

 

 

2,306

 

902

 

Cash and cash equivalents at end of period

 

$

2,589

 

1,244

 

 

See accompanying notes to condensed consolidated financial statements.

 

I-8


 

 

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

Condensed Consolidated Statement Of Equity

(unaudited)

Six months ended June 30, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

QVC

 

Liberty

 

Additional

 

other

 

 

 

Noncontrolling

 

 

 

 

 

Preferred

 

Group

 

Ventures

 

paid-in

 

comprehensive

 

Retained

 

interest in equity

 

Total

 

 

  

stock

  

Series A

  

Series B

  

Series A

  

Series B

  

capital

  

earnings

  

earnings

  

of subsidiaries

  

equity

 

 

 

amounts in millions

 

Balance at January 1, 2015

 

$

 —

 

5

 

 —

 

1

 

 —

 

4

 

(94)

 

5,757

 

107

 

5,780

 

Net earnings (loss)

 

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

385

 

25

 

410

 

Other comprehensive earnings (loss)

 

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

(94)

 

 —

 

(2)

 

(96)

 

Stock-based compensation

 

 

 —

 

 —

 

 —

 

 —

 

 —

 

28

 

 —

 

 —

 

 —

 

28

 

Series A QVC Group common stock repurchases

 

 

 —

 

 —

 

 —

 

 —

 

 —

 

(377)

 

 —

 

 —

 

 —

 

(377)

 

Stock issued upon exercise of stock options

 

 

 —

 

 —

 

 —

 

 —

 

 —

 

21

 

 —

 

 —

 

 —

 

21

 

Minimum withholding taxes on net share settlements of stock-based compensation

 

 

 —

 

 —

 

 —

 

 —

 

 —

 

(13)

 

 —

 

 —

 

 —

 

(13)

 

Excess tax benefit from stock-based compensation

 

 

 —

 

 —

 

 —

 

 —

 

 —

 

16

 

 —

 

 —

 

 —

 

16

 

Distribution to noncontrolling interest

 

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

 —

 

(42)

 

(42)

 

Reclassification (note 1)

 

 

 —

 

 —

 

 —

 

 —

 

 —

 

321

 

 —

 

(321)

 

 —

 

 —

 

Balance at June 30, 2015

 

$

 —

 

5

 

 —

 

1

 

 —

 

 —

 

(188)

 

5,821

 

88

 

5,727

 

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

 

I-9


 

Table of Contents

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Continued)

 

(unaudited)

 

(1)   Basis of Presentation

The accompanying condensed consolidated financial statements include the accounts of Liberty Interactive Corporation and its controlled subsidiaries (collectively, "Liberty" or the "Company" unless the context otherwise requires). All significant intercompany accounts and transactions have been eliminated in consolidation.

Liberty, through its ownership of interests in subsidiaries and other companies, is primarily engaged in the video and on-line commerce industries in North America, Europe and Asia.

The accompanying (a) condensed consolidated balance sheet as of December 31, 2014, which has been derived from audited financial statements, and (b) the interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. Additionally, certain prior period amounts have been reclassified for comparability with current period presentation. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in Liberty's Annual Report on Form 10-K for the year ended December 31, 2014.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Liberty considers (i) fair value measurement, (ii) accounting for income taxes, (iii) assessments of other-than-temporary declines in fair value of its investments and (iv) estimates of retail-related adjustments and allowances to be its most significant estimates.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance on revenue from contracts with customers.  The new guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated guidance will replace most existing revenue recognition guidance in GAAP when it becomes effective and permits the use of either a retrospective or cumulative effect transition method. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early application permitted.  The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its revenue recognition but does not believe that the standard will significantly impact its financial statements and related disclosures.

In April 2015, the FASB issued new accounting guidance on the presentation of debt issuance costs,  which requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability. The new guidance intends to simplify the presentation of debt issuance costs. This standard will more closely align the presentation of debt issuance costs under GAAP with the presentation under comparable International Financial Reporting Standards. The amendments in this new accounting standard are effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those years.  Early adoption is permitted for financial statements that have not been previously issued and retrospective application is required for each balance sheet presented.  We plan to adopt this new guidance in the fourth quarter of 2015.  The Company is evaluating the effect that the new guidance will have on its consolidated financial statements and related disclosures but other than a reclassification of deferred loan costs on the consolidated balance sheets, the Company does not believe that the standard will significantly impact its financial statements and related disclosures.

In July 2015, the FASB issued new accounting guidance that changes the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. The new principle is part of the FASB’s simplification initiative and applies to entities that measure inventory using a method other than last-in, first-out (LIFO) or the retail inventory method. The new standard is effective for the Company for fiscal years and interim periods 

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Table of Contents

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Continued)

 

(unaudited)

 

beginning after December 15, 2016. The Company has determined there is no significant effect of the standard on its ongoing financial reporting.

As a result of repurchases of Series A QVC Group common stock (formerly the Series A Liberty Interactive common stock), the Company’s additional paid-in capital balance was in a deficit position as of June 30, 2015. In order to maintain a zero balance in the additional paid-in capital account, we reclassified the amount of the deficit ($321 million) for the six months ended June 30, 2015 to retained earnings. 

Liberty holds investments that are accounted for using the equity method. Liberty does not control the decision making process or business management practices of these affiliates. Accordingly, Liberty relies on management of these affiliates to provide it with accurate financial information prepared in accordance with GAAP that Liberty uses in the application of the equity method. In addition, Liberty relies on audit reports that are provided by the affiliates' independent auditors on the financial statements of such affiliates. The Company is not aware, however, of any errors in or possible misstatements of the financial information provided by its equity affiliates that would have a material effect on Liberty's condensed consolidated financial statements.

Liberty has entered into certain agreements with Liberty Media Corporation ("LMC"), a separate publicly traded company, neither of which has any stock ownership, beneficial or otherwise, in the other, in order to govern relationships between the companies. These agreements include a Reorganization Agreement, Services Agreement, Facilities Sharing Agreement and Tax Sharing Agreement.

The Reorganization Agreement provides for, among other things, provisions governing the relationship between Liberty and LMC, including certain cross-indemnities. Pursuant to the Services Agreement, LMC provides Liberty with certain general and administrative services including legal, tax, accounting, treasury and investor relations support. Liberty reimburses LMC for direct, out-of-pocket expenses incurred by LMC in providing these services and for Liberty's allocable portion of costs associated with any shared services or personnel based on an estimated percentage of time spent providing services to Liberty. Under the Facilities Sharing Agreement, LMC shares office space and related amenities at its corporate headquarters with Liberty. Under these various agreements, approximately $2 million and $3 million for the three months ended June 30, 2015 and 2014, respectively, and $5 million and $6 million for the six months ended June 30, 2015 and 2014, respectively, were reimbursable to LMC. Additionally, the Tax Sharing Agreement provides for the allocation and indemnification of tax liabilities and benefits between Liberty and LMC and other agreements related to tax matters.

 

(2)   Tracking Stocks

A tracking stock is a type of common stock that the issuing company intends to reflect or "track" the economic performance of a particular business or "group," rather than the economic performance of the company as a whole. Liberty has two tracking stocks—QVC Group common stock and Liberty Ventures common stock, which are intended to track and reflect the economic performance of the QVC Group and the Ventures Group, respectively.

While the QVC Group and the Ventures Group have separate collections of businesses, assets and liabilities attributed to them, no group is a separate legal entity and therefore cannot own assets, issue securities or enter into legally binding agreements. Holders of tracking stock have no direct claim to the group's stock or assets and are not represented by separate boards of directors. Instead, holders of tracking stock are stockholders of the parent corporation, with a single board of directors and subject to all of the risks and liabilities of the parent corporation.

On October 3, 2014, Liberty announced that its board of directors approved the change in attribution from the QVC Group (referred to as the “Interactive Group” prior to the reattribution) to the Ventures Group of certain of its Digital Commerce companies (defined below) and cash, which was provided by QVC, Inc. (“QVC”) as a result of a draw-down of QVC’s credit facility. In return, holders of Liberty Interactive common stock received a dividend of approximately 67.7 million shares of Liberty Ventures common stock, or 0.14217 of a Liberty Ventures share for each share of Liberty Interactive common stock outstanding on October 13, 2014, the record date of the dividend. The distribution date for the dividend was October 20, 2014, and the Liberty Interactive common stock began trading ex-dividend on October 15, 2014. The reattributed Digital Commerce companies were comprised of Liberty’s consolidated subsidiaries Backcountry.com 

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Table of Contents

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Continued)

 

(unaudited)

 

(“Backcountry”), Bodybuilding.com, LLC, Provide Commerce, Inc. (“Provide”), CommerceHub, Evite, Inc. and LMC Right Start, Inc. (collectively, the “Digital Commerce” companies). The reattribution of the Digital Commerce companies is presented on a prospective basis from the date of the reattribution in Liberty’s condensed consolidated financial statements and attributed financial information, with October 1, 2014 used as a proxy for the date of the reattribution. In connection with the reattribution, the Liberty Interactive tracking stock trading symbol “LINTA” was changed to "QVCA" and the "LINTB" trading symbol was changed to "QVCB," effective October 7, 2014. Other than the issuance of Liberty Ventures shares in the fourth quarter of 2014, the reattribution of tracking stock groups had no consolidated impact on Liberty. Effective June 4, 2015, the name of the “Liberty Interactive common stock” was changed to the “QVC Group common stock.”  

The term "QVC Group" does not represent a separate legal entity, rather it represents those businesses, assets and liabilities that have been attributed to that group. Following the reattribution, the QVC Group is primarily comprised of our merchandise-focused televised-shopping programs, Internet and mobile application businesses and has attributed to it our wholly-owned subsidiary QVC and our approximate 38% interest in HSN, Inc., along with cash and certain liabilities that reside with QVC as well as certain liabilities related to our corporate indebtedness (see note 10) and certain deferred tax liabilities. As of June 30, 2015, the QVC Group has cash and cash equivalents of approximately $497 million, which includes subsidiary cash.  

The term "Ventures Group" does not represent a separate legal entity, rather it represents those businesses, assets and liabilities that have been attributed to that group. Following the reattribution, the Ventures Group is primarily comprised of our Digital Commerce businesses (see note 3 for discussion of disposed businesses) and interests in Expedia, Inc., FTD Companies, Inc. (“FTD”), Interval Leisure Group, Inc. and LendingTree, Inc., available-for-sale securities in Time Warner Inc. and Time Warner Cable Inc., as well as cash and cash equivalents of approximately $2,092 million at June 30, 2015. The Ventures Group also has attributed to it certain liabilities related to our Exchangeable Debentures (see note 10) and certain deferred tax liabilities. The Ventures Group is primarily focused on the maximization of the value of these investments and investing in new business opportunities. 

In May 2015, Liberty announced its entry into an agreement with Liberty Broadband Corporation ("Liberty Broadband"),  a separate publicly traded company, whereby Liberty will invest $2.4 billion in Liberty Broadband in connection with (and contingent upon) the closing of the proposed merger of Charter Communications, Inc. ("Charter") and Time Warner Cable Inc. ("TWC"). The proceeds of this investment will be used by Liberty Broadband to fund, in part, its agreement to acquire $4.3 billion of Charter stock. Liberty Broadband's acquisition will be made in support of (and contingent upon) the closing of the Charter-TWC merger. In connection with these transactions, it is expected that Charter will undergo a corporate reorganization, resulting in New Charter, a current subsidiary of Charter,  becoming the publicly traded parent company. Liberty's investment in Liberty Broadband will be funded using cash and short term investments and will be attributed to the Ventures Group.

Liberty, along with third party investors, all of whom will invest on the same terms as Liberty, have agreed to purchase newly issued shares of Liberty Broadband Series C common stock (the "Series C Shares") at a per share price of $56.23, which was determined based upon the fair value of Liberty Broadband's net assets on a sum-of-the parts basis at the time the investment agreements were executed. In the aggregate, Liberty Broadband has entered into investment agreements with respect to $4.4 billion of its Series C Shares. Liberty's investment in Liberty Broadband is subject to customary closing conditions and funding will only occur upon the completion of the Charter-TWC merger. Liberty Broadband intends to seek stockholder approval for the issuance of the Series C Shares in accordance with the rules and requirements of the Nasdaq Stock Market. If, for any reason, Liberty Broadband does not receive the requisite stockholder approval for the issuance of the Series C Shares, the purchasers will instead acquire a limited number of Series C Shares, together with shares of a newly issued series of non-convertible preferred stock of Liberty Broadband. Further, Liberty Broadband has the right, and may determine, to incur debt financing (subject to certain conditions) to fund a portion of the purchase price for its investment in New Charter, in which case Liberty Broadband may reduce the aggregate subscription for Series C Shares by up to 25%, with such reduction applied pro rata to all investors, including Liberty.

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Table of Contents

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Continued)

 

(unaudited)

 

Liberty and Liberty Broadband have also entered into an agreement with Charter which provides that Liberty and Liberty Broadband will exchange, in a tax-free transaction, the shares of TWC common stock held by each company for shares of New Charter Class A common stock (subject to certain limitations). In addition, Liberty has also agreed to grant Liberty Broadband a proxy over the shares of New Charter stock it receives in the exchange, along with a right of first refusal with respect to the underlying New Charter stock.

As the outcome of the transaction with Liberty Broadband and the Charter-TWC merger are uncertain due to pending stockholder and regulatory approvals, respectively, Liberty has not reflected any financial impacts in the condensed consolidated financial statements related to the respective agreements as of June 30, 2015.

See Exhibit 99.1 to this Quarterly Report on Form 10-Q for unaudited attributed financial information for Liberty's tracking stock groups.

(3) Disposals

On August 27, 2014, Liberty completed the spin-off to holders of its Liberty Ventures common stock shares of its former wholly-owned subsidiary, Liberty TripAdvisor Holdings, Inc. (“TripAdvisor Holdings”) (the “TripAdvisor Holdings Spin-Off”). TripAdvisor Holdings is comprised of Liberty’s former 22% economic and 57% voting interest in TripAdvisor, Inc. as well as BuySeasons, Inc., Liberty’s former wholly-owned subsidiary, and a corporate level net debt balance of $350 million. In connection with the TripAdvisor Holdings Spin-Off during August 2014, TripAdvisor Holdings drew down $400 million in margin loans and distributed approximately $350 million to Liberty. This transaction has been recorded at historical cost due to the pro rata nature of the distribution. Following the completion of the TripAdvisor Holdings Spin-Off, Liberty and TripAdvisor Holdings operate as separate, publicly traded companies, and neither has any stock ownership, beneficial or otherwise, in the other. The condensed consolidated financial statements of Liberty have been prepared to reflect TripAdvisor Holdings as discontinued operations. Accordingly, the revenue, costs and expenses, and cash flows of the businesses, assets and liabilities owned by TripAdvisor Holdings at the time of the TripAdvisor Holdings Spin-Off have been excluded from the respective captions in the accompanying condensed consolidated statements of operations, comprehensive earnings and cash flows in such condensed consolidated financial statements. Additionally, TripAdvisor, Inc. and BuySeasons, Inc. are no longer reflected in the segment financial information for all periods presented.

 

In connection with the TripAdvisor Holdings Spin-off, Liberty and TripAdvisor Holdings entered into a tax sharing agreement (the “Tax Sharing Agreement”).  The Tax Sharing Agreement provides for the allocation and indemnification of tax liabilities and benefits between Liberty and TripAdvisor Holdings and other agreements related to tax matters.  Among other things, pursuant to the Tax Sharing Agreement, TripAdvisor Holdings has agreed to indemnify Liberty, subject to certain limited exceptions, for losses and taxes resulting from the TripAdvisor Holdings Spin-Off to the extent such losses or taxes result primarily from, individually or in the aggregate, the breach of certain restrictive covenants made by TripAdvisor Holdings (applicable to actions or failures to act by TripAdvisor Holdings and its subsidiaries following the completion of the TripAdvisor Holdings Spin-Off).

 

In October 2014, the IRS completed its examination of the TripAdvisor Holdings Spin-Off and notified Liberty that it agreed with the nontaxable characterization of the transaction.  Liberty expects to execute a closing agreement with the IRS documenting this conclusion during 2015.

 

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Table of Contents

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Continued)

 

(unaudited)

 

Certain combined financial information for TripAdvisor Holdings, which is included in earnings (loss) from discontinued operations, is as follows (amounts in millions, except per share amounts):

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

Six months ended

 

 

 

June 30, 2014

 

June 30, 2014

 

Revenue

 

$

335

 

629

 

Earnings (loss) before income taxes

 

$

28

 

55

 

Earnings (loss) attributable to Liberty Interactive Corporation shareholders

 

$

(1)

 

 —

 

 

Earnings per share of discontinued operations

 

The combined impact from discontinued operations, discussed above, is as follows:

 

 

 

 

 

 

 

 

 

 

Three months ended 

 

Six months ended

 

 

 

June 30, 2014

 

June 30, 2014

 

Basic earnings (loss) from discontinued operations attributable to Liberty shareholders per common share (note 5):

 

 

 

 

 

 

Series A and Series B QVC Group common stock

 

$

(0.01)

 

(0.02)

 

Series A and Series B Liberty Ventures common stock

 

$

0.09

 

0.15

 

Diluted earnings (loss) from discontinued operations attributable to Liberty shareholders per common share (note 5):

 

 

 

 

 

 

Series A and Series B QVC Group common stock

 

$

(0.01)

 

(0.02)

 

Series A and Series B Liberty Ventures common stock

 

$

0.09

 

0.15

 

 

The assets and liabilities included in the TripAdvisor Holdings Spin-Off, and their resulting impacts on the attributed statements of operations, were included in discontinued operations based on which group owned the assets at the time of the TripAdvisor Holdings Spin-Off.

Provide was included in the Digital Commerce companies prior to the sale of Provide to FTD on December 31, 2014 in exchange for cash and shares of FTD common stock representing approximately 35% of the combined company (see note 8 for additional information related to this transaction). Subsequent to this transaction, the Company’s interest in FTD, accounted for under the equity method, is included in the Digital Commerce companies. Given Liberty’s significant continuing involvement with FTD, Provide is not presented as a discontinued operation in the Company’s condensed consolidated financial statements.

 

On June 30, 2015, Liberty sold Backcountry for aggregate consideration, including assumption of debt, amounts held in escrow, and a noncontrolling interest, of approximately $350 million.  The sale resulted in a $105 million gain, which is included in “Gains (losses) on dispositions, net” in the accompanying condensed consolidated statement of operations.  Backcountry is included in the Digital Commerce companies through June 30, 2015 and is not presented as a discontinued operation as the sale does not represent a strategic shift that has a major effect on Liberty’s operations and financial results.  Included in revenue in the accompanying condensed consolidated statements of operations is $105 million and $99 million for the three months ended June 30, 2015 and 2014, respectively, and $227 million and $211 million for the six months ended June 30, 2015 and 2014, respectively, related to Backcountry.  Included in net earnings (loss) in the accompanying condensed consolidated statements of operations are losses of $4 million and $3 million for the three months ended June 30, 2015 and 2014, respectively, and losses of $3 million and $4 million for the six months ended June 30, 2015 and 2014, respectively, related to Backcountry.  Included in total assets in the accompanying condensed consolidated balance sheets as of December 31, 2014 is $323 million related to Backcountry.

 

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Table of Contents

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Continued)

 

(unaudited)

 

(4)   Stock-Based Compensation

The Company has granted to certain of its directors, employees and employees of its subsidiaries, stock appreciation rights ("SARs"), restricted stock, performance-based restricted stock units and options to purchase shares of Liberty common stock (collectively, "Awards"). The Company measures the cost of employee services received in exchange for an equity classified Award (such as stock options and restricted stock) based on the grant-date fair value of the Award, and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the Award). The Company measures the cost of employee services received in exchange for a liability classified Award (such as SARs that will be settled in cash) based on the current fair value of the Award, and remeasures the fair value of the Award at each reporting date.

Included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations are $29 million and $26 million of stock-based compensation during the three months ended June 30, 2015 and 2014, respectively, and $44 million and $51 million during the six months ended June 30, 2015 and 2014, respectively.

 

During the six months ended June 30, 2015, Liberty granted 2.0 million options to QVC employees to purchase shares of Series A QVC Group common stock.  Such options had a weighted average grant-date fair value of $11.87 per share and vest semi-annually over 4 years.

Also during the six months ended June 30, 2015, Liberty granted to Liberty employees 2.3 million and 652 thousand options to purchase shares of Series A QVC Group common stock and Series A Liberty Ventures common stock, respectively.  Such options had a weighted average grant-date fair value of $11.79 and $18.27 per share, respectively, and each grant contains options that vest over two different periods, annually over three years and 50% on each of December 31, 2019 and 2020.  

In connection with our CEO’s employment agreement, Liberty also granted 132 thousand and 135 thousand performance-based options of Series B QVC Group common stock and Series B Liberty Ventures common stock, respectively, and 182 thousand and 13 thousand performance-based restricted stock units of Series B QVC Group common stock and Series B Liberty Ventures common stock, respectively.  Such options had a weighted average grant-date fair value of $10.10 per share and $17.16 per share, respectively. The restricted stock units had a weighted average grant-date fair value of $29.41 per share and $42.33 per share, respectively. The options and restricted stock units cliff vest in one year, subject to satisfaction of certain performance objectives.

The Company has calculated the grant-date fair value for all of its equity classified Awards and any subsequent remeasurement of its liability classified Awards using the Black-Scholes Model. The Company estimates the expected term of the Awards based on historical exercise and forfeiture data. The volatility used in the calculation for Awards is based on the historical volatility of Liberty's stock and the implied volatility of publicly traded Liberty options. The Company uses a zero dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject options.

I-15


 

Table of Contents

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Continued)

 

(unaudited)

 

Liberty—Outstanding Awards

The following tables present the number and weighted average exercise price ("WAEP") of the Awards to purchase QVC Group and Liberty Ventures common stock granted to certain officers, employees and directors of the Company.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

QVC Group

 

 

    

 

    

 

 

    

Weighted

    

Aggregate

 

 

 

 

 

 

 

 

average

 

intrinsic

 

 

 

Series A

 

 

 

 

remaining

 

value

 

 

 

(000's)

 

WAEP

 

life

 

(millions)

 

Outstanding at January 1, 2015

 

24,900

 

$

17.49

 

 

 

 

 

 

 

Granted

 

4,347

 

$

28.98

 

 

 

 

 

 

 

Exercised

 

(2,633)

 

$

15.57

 

 

 

 

 

 

 

Forfeited/Cancelled

 

(483)

 

$

22.69

 

 

 

 

 

 

 

Outstanding at June 30, 2015

 

26,131

 

$

19.50

 

4.5

years

 

$

221

 

Exercisable at June 30, 2015

 

15,497

 

$

16.71

 

3.7

years

 

$

171

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

QVC Group

 

 

    

 

    

 

 

    

Weighted

    

Aggregate

 

 

 

 

 

 

 

 

average

 

intrinsic

 

 

 

Series B

 

 

 

 

remaining

 

value

 

 

 

(000's)

 

WAEP

 

life

 

(millions)

 

Outstanding at January 1, 2015

 

1,044

 

$

24.78

 

 

 

 

 

 

 

Granted

 

132

 

$

29.41

 

 

 

 

 

 

 

Exercised

 

(398)

 

$

16.51

 

 

 

 

 

 

 

Outstanding at June 30, 2015

 

778

 

$

29.79

 

6.5

years

 

$

 —

 

Exercisable at June 30, 2015

 

 —

 

$

 —

 

 —

years

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liberty Ventures

 

 

    

 

    

 

 

    

Weighted

    

Aggregate

 

 

 

 

 

 

 

 

average

 

intrinsic

 

 

 

Series A

 

 

 

 

remaining

 

value

 

 

 

(000's)

 

WAEP

 

life

 

(millions)

 

Outstanding at January 1, 2015

 

3,997

 

$

19.10

 

 

 

 

 

 

 

Granted

 

652

 

$

41.40

 

 

 

 

 

 

 

Exercised

 

(278)

 

$

19.92

 

 

 

 

 

 

 

Forfeited/Cancelled

 

(3)

 

$

26.45

 

 

 

 

 

 

 

Outstanding at June 30, 2015

 

4,368

 

$

22.37

 

4.5

years

 

$

75

 

Exercisable at June 30, 2015

 

2,874

 

$

18.79

 

3.7

years

 

$

59

 

 

 

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Table of Contents

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Continued)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liberty Ventures

 

 

    

 

    

 

 

    

Weighted

    

Aggregate

 

 

 

 

 

 

 

 

average

 

intrinsic

 

 

 

Series B

 

 

 

 

remaining

 

value

 

 

 

(000's)

 

WAEP

 

life

 

(millions)

 

Outstanding at January 1, 2015

 

1,507

 

$

36.24

 

 

 

 

 

 

 

Granted

 

135

 

$

42.33

 

 

 

 

 

 

 

Exercised

 

(100)

 

$

16.82

 

 

 

 

 

 

 

Outstanding at June 30, 2015

 

1,542

 

$

38.04

 

6.5

years

 

$

5

 

Exercisable at June 30, 2015

 

 —

 

$

 —

 

 —

years

 

$

 —

 

 

As of June 30, 2015, the total unrecognized compensation cost related to unvested Awards was approximately $121 million. Such amount will be recognized in the Company's consolidated statements of operations over a weighted average period of approximately 2.8 years.

Other

Certain of the Company's other subsidiaries have stock based compensation plans under which employees and non-employees are granted options or similar stock based awards. Awards made under these plans vest and become exercisable over various terms. The awards and compensation recorded, if any, under these plans is not significant to Liberty.

 

 

(5)   Earnings (Loss) Per Common Share

Basic earnings (loss) per common share ("EPS") is computed by dividing net earnings (loss) by the weighted average number of common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented.

Series A and Series B QVC Group Common Stock

Excluded from diluted EPS, for the three months ended June 30, 2015 and 2014, are 4 million and 2 million potential common shares, respectively, because their inclusion would be antidilutive. Excluded from diluted EPS, for the six months ended June 30, 2015 and 2014, are 4 million and 2 million potential common shares, respectively, because their inclusion would be antidilutive.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

QVC Group Common Stock

 

 

    

Three months ended 

    

Six months ended

 

 

 

June 30, 2015

 

June 30, 2014

 

June 30, 2015

 

June 30, 2014

 

 

 

number of shares in millions

 

Basic EPS

 

469

 

486

 

471

 

490

 

Potentially dilutive shares

 

7

 

10

 

7

 

10

 

Diluted EPS

 

476

 

496

 

478

 

500

 

 

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Table of Contents

LIBERTY INTERACTIVE CORPORATION AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Continued)

 

(unaudited)

 

Series A and Series B Liberty Ventures Common Stock

 

As discussed in note 11, Liberty completed a two for one stock split on April 11, 2014 on its Series A and Series B Liberty Ventures common stock. Therefore, all prior period outstanding share amounts have been retroactively adjusted for comparability.  Excluded from diluted EPS, for all periods presented, are less than a million potential common shares because their inclusion would be antidilutive.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liberty Ventures Common Stock

 

 

    

Three months ended 

    

Six months ended

 

 

 

June 30, 2015

 

June 30, 2014

 

June 30, 2015

 

June 30, 2014

 

 

 

number of shares in millions

 

Basic EPS

 

141

 

73

 

141

 

73

 

Potentially dilutive shares

 

2

 

1

 

2

 

1

 

Diluted EPS

 

143

 

74

 

143

 

74